My apologies to you gg for not replying earlier. I have been a bit busy. Like you I like bottoms very much.
I thought I’d resurrect this thread for the benefit of new members as identifying a stock which has properly bottomed can provide quite a nice profitable trade. And for established members to pick their brains on the topic and perhaps add some other prospects.
So a stock that bottoms classically has three components.
- A gradual decrease in value and volume
- An increase in trading volume as the bottom is close to being reached and holders despair.
- Then a rise in price, sometimes gradual sometimes not, on better volume than on the way down as new traders move in.
A few months ago I noticed a post on CRN Coronado Global Resources Ltd.
CRN – Coronado Global Resources Inc.
Coronado is a low-cost global producer, marketer and exporter of a full range of premium quality met coals. Coronado owns a portfolio of operating mines located in Queensland, Australia, and in the states of Virginia and West Virginia in the US. Coronado has a single 100%-owned producing mining…
www.aussiestockforums.com
It was not on any watch-lists of mine and I was unfamiliar with the stock but the chart was compelling and illustrated the first two of the above three elements of a bottoming stock. It has had other attempts at bottoming and for capital protection and maximisation it is better to have a strict stop loss and secondly not be afraid to add should it appear to be be a proper recovery.
And yes, it could all go to sh*t, so believe me I will not crow until it regains $1.20 and stops have been moved up. A chart illustrating the above.
gg
